Crash and recover: Stocks register largest intra-day fall in history before rebounding
Statesman Report
KARACHI: Trading at the Pakistan Stock Exchange was paused for 45 minutes on Monday, seven minutes after the opening bell, after the benchmark index dropped 2,106 points.
According to reports from the market, trading was halted at around 9:37am after a rapid 5.83 per cent decline (2,106 points) in share prices.
After trading resumed at 10:24am, stocks continued their slide to reach the largest ever intra-day plunge in Pakistan’s history. By 10:35am, the benchmark index was down 2,302 points or 6.02pc.
Monday’s plunge surpassed the previous record for the highest intra-day loss, when the market had registered a fall of 5.16pc – around 300 points – to reach 5,571 on Feb 25, 2009.
But soon after reaching its nadir, the market began reversing and by the day’s close, stocks had recovered 1,137 of the 2,302 points lost earlier in the day.
At market close, the KSE-100 index stood at 37,054 points – down 3.12pc or 1,165 points.
Trading halted for 45 mins
According to new bourse rules, if the KSE-30 index moves 4pc or more in any direction, trading is halted for 45 minutes, experts told Dawn.com.
A spokesperson of the Securities and Exchange Commission of Pakistan said a market halt rule had been introduced by the SECP a few months ago "to deal with such panic situations".
SECP is monitoring the situation to ensure fair and transparent trading, he added. He said the break in trading gives companies time to collect margins and settle trade.
"It also gives companies and investors a cooling period to settle down. After margins have been collected successfully, trading session is resumed."